By Patrick Rial and Chan Tien Hin
Nov. 1 (Bloomberg) -- Asian stocks rallied the most in more than a year this week as central bank steps to ease credit markets spurred demand for the cheapest regional shares in at least eight years. Equities still fell the most ever in October.
Samsung Electronics Co., the world's biggest computer- memory maker, surged from a 3 1/2-year low after the U.S. central bank provided funds to South Korea. China Mobile Ltd., the world's No. 1 mobile phone operator, jumped 18 percent after China cut its benchmark interest rate for the third time in two months. Reliance Industries Ltd., India's most valuable company, rebounded 35 percent, the most in 12 years.
The MSCI Asia Pacific Index surged 6.9 percent to 85.93 in the five days to Oct. 31, the steepest weekly rise since the period ending Aug. 24 last year. Shares on the gauge had plunged to their cheapest since 2000.
``We're coming from a very oversold position, so it deserved a very good bounce,'' said Scott Lim, who oversees about $850 million as chief executive officer at MIDF Amanah Asset Management Sdn. in Kuala Lumpur. ``If governments continue to work together and cut interest rates and provide liquidity, we might not see the kind of massive prolonged recession that everybody fears.''
Companies on the gauge fell to an average of 8.2 times trailing earnings on Oct. 27, the cheapest since Bloomberg began tracking the data in 2000. That compared with an average of 19 times during the last five years.
October Drop
For October, the index tumbled almost 20 percent amid signs the credit crisis is deepening and as fund redemptions and currency market volatility prompted an exodus of capital from the region. The MSCI Asia Pacific has lost 45 percent this year, exceeding declines for benchmarks in the U.S. and Europe.
Mitsubishi UFJ Financial Group Inc. led Japan's banks lower last week after the company said tumbling share prices eroded its capital base and forced it to raise money through a share issue.
Cnooc Ltd. surged 29 percent in Hong Kong as a mid-week rally pared losses for crude oil futures. Samsung soared 31 percent to 535,000 won. China Mobile advanced 18 percent to HK$67.80. Toyota Motor Corp., the world's second-largest automaker, advanced 17 percent to 3,730 yen.
The Fed said on Oct. 29 it agreed to provide $30 billion each to the central banks of South Korea, Singapore, Brazil and Mexico to alleviate a dollar shortage that had sent the won tumbling. China's central bank cut its benchmark one-year lending rate to 6.66 percent from 6.93 percent, followed by a 0.5 percent decrease by the Fed. Japan and Taiwan also joined this week by lowering borrowing costs.
Banks' Capital, Earnings
Reliance Industries climbed 35 percent to 1,375.45 rupees. The shares dropped to as low as 1.6 times book value this week, a level not seen since July 2005. China National Building Material Co., the country's second-largest cement maker, rocketed 106 percent to HK$4.33, paring this year's decline to 86 percent.
Mitsubishi UFJ lost 12 percent to 598 yen. Japan's largest listed bank said it plans to raise more than $10 billion by selling new shares to bolster its capital. Smaller rival Sumitomo Mitsui Financial Group Inc. slumped 12 percent. KB Financial Group Inc., the holding company for South Korea's biggest bank, lost 13 percent after the lender reported earnings that missed analysts' estimates.
Cnooc, China's biggest oil and gas producer, rose 29 percent to HK$6.30 for the week and had its biggest gain ever on Oct. 30. Rio Tinto Group, the world's third-largest mining company, jumped 21 percent to A$77.60.
Crude oil rose 5.7 percent for the week to $67.81, ending a four-week slide that saw the price drop 40 percent. Copper futures surged 8.5 percent. A measure of six metals traded on the London Metal Exchange, including zinc and nickel, added 7.8 percent.
To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net; Chan Tien Hin in Kuala Lumpur at thchan@bloomberg.net
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